The number of new projects (401) announced during Q2 (April – June) 2012 across the global energy industry is down 15% compared to Q1 2012, while the total potential investment value of US$ 295 billion is down 7.5% on last quarter, and down 6.2% on Q2 2011.
It should be noted that in nearly all cases newly proposed projects must first undergo various planning and consent approvals which may take several years. Also, early stage proposals do not necessarily have financing agreed and in place and so there will always be a proportion of projects that do not gain consent or finance.
Upstream, midstream and downstream sectors
The upstream sector has seen an increase of 55% in the potential investment value of new projects, up from US$ 33 billion in Q1 2012 to US$ 50 billion in Q2 2012 with a fall of 34% in new project numbers, down from 70 to 46 in Q2 2012. The Ukraine and Russia together account for two-thirds of the total potential investment value in this sector between them. The largest project announced is the proposed Skif Shale Gas Project in the Ukraine which could see investment of up to US$ 12 billion.
The midstream sector has seen a 56% decrease in the potential investment value of new projects with a 17% decrease in the number of new project announcements (66) since Q1 2012, down from US$ 89 billion to US$ 39 billion this quarter. This decrease is partly due to the significant number of LNG projects proposed for development in the USA in the previous quarter. Key hotspots of activity this quarter can be found in the USA and Canada, representing 63% of the total potential investment value between them.
In the downstream sector, the number of new quarterly projects (54) has dropped by 7% since Q1 2012 with a 47% increase in the total potential investment value from US$ 43 billion in Q1 2012 to US$ 63 billion in Q2 2011. Venezuela and Russia represent 40% of the total potential investment value of projects announced this quarter, with 9 projects worth US$ 25 billion. The largest projects are the proposed US$ 9.7 billion Petrobicentenario Refinery in Venezuela and the US$ 5 billion Moscow Oil Refinery in Russia.
Global power projects
In the renewables sector the number of new projects (125) is down 22% in Q2 2012, with the potential investment value also falling 25% from US$ 76 billion in Q1 2012 to US$ 57 billion in Q2 2012. Whilst there is a wide spread of projects around the globe, with 42 countries announcing renewables projects, France and Pakistan stand out as the clear leaders this quarter. France announced US$ 10 billion of offshore wind farm projects, and Pakistan's figures were dominated by the US$ 5 billion Dasu Hydroelectric Power Plant.
In the power sector, the number of new projects (110) has increased by 8% this quarter with the potential total investment value of new projects rising 10% to US$85 billion in Q2 2012. The most significant volume of announcements came from the USA and India, this quarter, with 9 projects in the USA with a combined potential investment value of US$ 23 billion and 10 projects in India with a value of US$ 11 billion. The largest project is the US$ 18 billions Turkey Point Nuclear Plant Expansion (Units 6 & 7) in the USA.
In summary, this quarter we have seen a mixed-bag of results, with the upstream, downstream and power sectors all showing signs of growth in potential investment value while the potential value of new projects reported in the renewables sector is down by 25% on last quarter and 33% on the same quarter the previous year. However, overall, the picture shows that the industry as a whole is holding steady.
Written by Dr Phil Goddard, Head of EIC Consult.
Read the article online at: https://www.oilfieldtechnology.com/exploration/09072012/global-energy-industry-is-still-buoyant/